Russia's new Eurasian Economic Union could get its own single currency

Putin coin

REUTERS/Andrei Romanov

A commemorative coin from the series "The Gatherer of Russian Lands", which was minted to mark the recent accession of Crimea into the Russian Federation, May 6, 2014.

After his mysterious recent absence, Russian president Vladimir Putin is in Astana, Kazakhstan today for a meeting of the Eurasian Economic Union.

The organisation is a new economic bloc comprised of Russia, Belarus, Kazakhstan, Kyrgyzstan and Armenia (Ukraine unsurprisingly opted not to join) - and it's part of Russia's strategy to embrace its "near abroad".

The union is still in its early days, having only formally begun in January 2015, but the bloc has tentatively agreed to bring in a single currency and a Eurasian Central Bank by 2025.Advertisement

Belarus' Mikhail Myasnikovich, who was prime minister until 2014, is calling for the process to be fast-tracked so that the currency is ready in the next four years, according to Belarusian state news.

And Putin himself instructed Russia's central bank earlier this month to work with both the government and other central banks "to determine the future direction of integration in the monetary and financial sectors in the framework of the Eurasian Economic Union with the study of the feasibility of establishing in the future monetary union."

The deadline on the Kremlin instruction is September 1 this year, so there should be more news on the monetary union's progress by then.

It looks like the Eurasian Union is trying to go for an accelerated version of the process the European Union went through in the second half of the 20th century. They've already spent years trying to create a single market among the countries involved, without trade tariffs, and they're now looking towards further integration.

What would a Eurasian currency look like? Well, probably not too much different to the ruble - Russia's economy is far and away the largest in the union, and any currency would mostly respond to weakness or strength in Russia. That might seem like a bad thing for other countries, but as with some small European states that wanted toYou might think that a project which combines the oil-driven volatility of the ruble with the vicious diplomatic bickering of the euro was not such a great idea, but the EEU seems like it's made its mind up - at least for now. According to the Moscow Times, Kazakhstan's view of the union is getting a little less rosy, which could kill off plans for further political integration.Advertisement

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